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HomeMy WebLinkAbout03/07/2000, 7 - NEW LEASE WITH THE SAN LUIS OBISPO CHILDREN'S MUSEUM ADcounat M""D� 3-7_ �p aacEnoa RepoRt CITY OF SAN LUIS OBISPO FROM: Ken Hampian, Assistant City Administrative Officer,�� Prepared By: Wendy George, Assistant to the City Administrative Officer SUBJECT: New Lease with the San Luis Obispo Children's Museum CAO RECOMMENDATION Approve a long-term lease agreement with the San Luis Obispo Children's Museum for property located at 1010 Nipomo Street. DISCUSSION Background On June 16, 1998, the City Council gave conceptual approval to a long-term lease with the San Luis Obispo Children's Museum for City-owned property at 1010 Nipomo Street. Although the property has been used by the Children's Museum since 1990, it had been promised to the San Luis Obispo Little Theatre (SLOLT) as the eventual site of a new theatre. At the June meeting, the Council agreed with staff's recommendation that the site no longer be held for the SLOLT, since its building campaign for a new theatre had shown no progress. Instead, staff proposed that long-term use of the site be transferred to the Children's Museum, which was well into a capital campaign and eager to begin expansion. At the same meeting, the Council extended SLOLT's current lease at the old library (888 Morro Street) for two years, and agreed to provide assistance when it was ready to look for a new location. Although the Children's Museum had already developed a conceptual design for its remodel and was financially ready to proceed, its board became concerned that the impending construction of the Creek Walk might affect the ultimate size of the lot and make building as designed impossible. As a result, the board requested that it be allowed to delay signing a long-term lease until the Creek Walk was completed and the board could be assured that the remodel design would work at the location. In January, 2000, the board notified the City that it was comfortable with pursuing the long-term lease. Terms of the Lease The terms of the lease are very similar to those that were used when the site was originally leased to SLOLT on a long-term basis. The following are specific highlights: • Expiration is on December 31, 2043 (forty years after construction is completed). • Rent is $1.00 per year. • The museum must be open at least twenty hours per week. 7-1 Council Agenda Report--Children's Museum Lease Page 2 • The Children's Museum is responsible for all maintenance of the building and grounds; the City maintains the nearby Creek Walk. • The City reserves the right to enter the property for any necessary maintenance on the Creek Walk. • Construction design will be finalized by December 31, 2001; working drawings will be completed by June 30, 2002; and construction will begin no later than January 1, 2003 and will be concluded by June 30, 2003. • Should the City need to terminate the lease for other official City business, a "buyout" schedule is provided for improvements made by the Children's Museum. • Should the Children's Museum fail to complete the proposed remodel or choose to terminate the lease, all improvements become the property of the City. Standard City indemnification and insurance coverage is required from the Children's Museum FISCAL IMPACT The Children's Museum will be making an annual lease payment of $1.00. This payment is significantly below the market rental of the property. However, the City made a decision back in 1990, when it originally agreed to a long-term lease with SLOLT, that the property was best used for cultural purposes, as provided for in the Conceptual Physical Plan for the City's Center. ALTERNATIVES Council could choose to shorten the tern of the lease or charge a higher rent. As indicated, the term of the lease and the lease payment proposed are consistent with those originally approved by the Council in 1990, when a long-term lease was established with SLOLT for the same site. ATTACHMENT Lease with Children's Museum 7-2 AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND SAN LUIS OBISPO'S CHILDREN'S MUSEUM FOR USE OF CITY PROPERTY AT 1010 NIPOMO STREET This Agreement is entered into this day of 2000, between the City of San Luis Obispo (herein referred to as "City") and the San Luis Obispo Children's Museum, a non-profit organization (herein referred to as "Children's Museum"). WITNESSETH WHEREAS, the City is the legal owner of the property located at 1010 Nipomo Street in the City of San Luis Obispo as shown on Attachment A; and WHEREAS, the City has allowed the Children's Museum to operate a children's museum on this site since September of 1990; and WHEREAS, the City considers continued use of this property by the Children's Museum to be in the public interest and an appropriate complement to the Mission Plaza and its activities; and WHEREAS, the Children's Museum wishes to expand its current facility, at its own expense, on the present location; NOW, THEREFORE, in consideration of the mutual covenants, conditions, promises, and agreements herein set forth, the City and Museum hereby agree to the following terms and conditions for use of this property: TERMS 1. Location of Property. The City will allow the Children's Museum to use City owned property located at 1010 Nipomo Street in San Luis Obispo to operate a Children's Museum for the term of this agreement. 2. Purpose of Agreement. The Children's Museum agrees to lease the subject property and to develop and operate a facility on the proposed site for the term of the lease, which will serve to meet the intent of this agreement. The City shall have no obligation for development, operation or maintenance of the proposed facility. Any costs incurred for development, operation or maintenance of the facility shall be the sole responsibility of the Children's Museum. 3. Term of Agreement The term of this agreement shall commence upon execution by both parties and expire on December 31, 2042. The Children's Museum shall reserve the first right to negotiate an additional term upon mutual agreement of the 1 7-3 City and the Children's Museum, not to exceed fifteen (15) years, for purposes outlined in the intent of this agreement. The Children's Museum shall submit any notice of interest in an extended term no less than one (1) year prior to termination of the base term of the lease agreement. The term of this agreement shall be subject to the termination provisions of Paragraphs 15 and 16. 4. Extent and Condition of the Premises. The Children's Museum shall accept the Premises "as is". This agreement shall not obligate the City to guarantee the condition of the Premises, the suitability of the Premises for the Children's Museum's intended use, the duration that the Premises may be safely occupied, or the availability of alternate facilities. Should any occurrence (such as fire, earthquake, flood or the need to repair, improve or use the Premises) necessitate closing the Premises or a portion of the Premises to the public, the Children's Museum shall have no recourse to the City for any loss incurred. 5. Rent In recognition of the benefits the Children's Museum provides the community, the City agrees to provide the Children's Museum the use of site for $1 per year, payable on the anniversary date of this agreement each year. 6. Cost of Operations. The Children's Museum shall bear the entire cost of its operations on the Premises, including utility bills and any taxes and fees related to its occupancy of the Premises, such as possessory interest taxes. 7. ADA Compliance. The Children's Museum agrees to assume full responsibility for insuring that the facility complies with the requirements of the Americans with Disabilities Act. 8. Minimum Hours of Operation. The Children's Museum agrees to keep the museum open to the public a minimum of twenty hours per week. 9. Maintenance by the City. The City agrees to provide routine maintenance of the natural vegetation along the adjacent Creek Walk and creek bank. 10. Maintenance by the Children's Museum. The Children's Museum agrees to maintain the facility in a first class condition at all times. This includes maintaining and cleaning the building interior, exterior, performing routine repairs and maintaining landscaping. 11. Creek Access. The City reserves the right to enter the Premises to construct and maintain retaining walls, slope banks, creek channel, Nipomo Street Bridge, the San Luis Obispo Creek Walk and other related items both as they exist today and as they may be modified, changed or replaced in the future. The City reserves the right of the public to pass over the property on the San Luis Obispo Creek Walk. 12. Remodel of Facility. The Children's Museum intends to remodel the 2 7-4 current facility, at its own expense, in accordance with a design approved by the City. 13. Fundraising Plan. The Children's Museum agrees to prepare a fundraising plan by September 30, 2000, that will demonstrate to the City's satisfaction the Children's Museum's ability to raise the amount needed to remodel the museum within the time frame set out in this agreement. If the Children's Museum does not demonstrate to the satisfaction of the City that it has raised or otherwise has funds committed in accordance with its fundraising plan, then the City shall have the right to terminate or extend this agreement, at is sole option and discretion. 14. Construction Schedule. The Children's Museum agrees to the following schedule for carrying out the design and construction of the building remodel. • Final design approvals will be secured no lather than December 31, 2001. • Working drawings will be completed no later than June 30, 2002. • The building permit will be secured no later than September 30, 2002. Construction will begin no later than January 1, 2003, and will conclude by June 30, 2003. The City reserves the right to grant time extensions or to cancel this agreement for failure to progress on this schedule. The Children's Museum shall follow all City requirements, including such items as fees and permits, that are appropriate to a remodel of the kind proposed. 15. Termination of Lease by City. The City reserves the right to terminate this agreement by notifying the Children's Museum in writing six months prior to termination should the City need the property for official City business. Additionally, should the Children's Museum be unable to complete the proposed remodel, the lease may be terminated, and, at the City's option, all improvements will become the property of the City or the site shall be delivered free and clear of all improvements. In the event of early termination of this agreement by the City after completion of the remodel, the City shall have the option to buy out improvements at the proportional rate of 90% of actual construction costs if cancellation is within the first five (5) years, 70% between six (6) and fifteen (15) years, 50% between sixteen (16) and twenty-five (25) years and nothing thereafter. The above "buyout" provisions shall be in lieu of any other compensation, including, but not limited to, relocation assistance. 16. Termination of Lease by Children's Museum. The Children's Museum may terminate this agreement by notifying the City in writing six months prior to termination. In the event that the Children's Museum chooses to exercise this option, all 3 7-5 permanent improvements (excluding removable exhibits and outdoor play equipment specifically related to the functioning of the museum) shall revert to the City of San Luis Obispo. 17. Labor Code Requirements. The Children's Museum certifies that it is aware of the provisions of the Labor Code of the State of California, which require every employer to be insured against liability for workers compensation or to undertake self- insurance in accordance with the provisions of that Code, and it certifies that it will comply with such provisions throughout the term of this agreement. 18. Relationship of Parties. Under this agreement, the City shall be solely and exclusively a lessor, and the Children's Museum shall be solely and exclusively a lessee. The Children's Museum shall not be considered a partner, agent, officer or employee of the City. The Children's Museum's officers, members, affiliates, volunteers, employees and independent contractors shall not be considered agents, officers or employees of the City. 19. Assignment The Children's Museum shall not assign this agreement to another parry without the City's prior written consent. 20. Subrogation Waiver. The City and the Children's Museum release and relieve each other and waive their entire rights of recovery against each other for damage from perils covered by their property insurance, whether due to the negligence of the City, the Children's Museum, or their agents, officers, employees or guests. 21. Proof of Insurance. The Children's Museum agrees to provide proof of insurance in accordance with the requirements established in Attachment B. 22. Indemnification The Children's Museum hereby agrees to indemnify and save harmless the City, its officers, agents, and employees against: A. Any and all claims and demands which may be made against the City, its officers, agents or employees by reason of any injury or death of any person or corporation caused by any act or omission of the Children's Museum under this agreement or of the Children's Museum's employees or agents; B. Any and all damage to or destruction of the property of the City, its officers, agents, or employees, occupied or used by or in the care, custody, or control of the Children's Museum, or in proximity to the site of the Children's Museum work, caused by any act or omission of the Children's Museum under this agreement; C. Any and all claims and demands which may be made against the City, its officers, agents, or employees by reason of any injury to or death of or damage suffered or sustained by an employee or agent of the Children's Museum under this agreement, however caused, excepting, any such claims or demands which 4 7-6 are the result of the sole active negligence or willful misconduct of the City, its officers, agents, or employees; D. Any and all claims and demands which may be made against the City, its officers, agents or employees by reason of infringement or alleged infringement of any trademark or copyright rights or claims caused by the-use of any apparatus, appliance,.or materials furnished by the Children's Museum under this agreement; and E. Any and all penalties imposed or damages sought on account of the violation of any law or regulation or of any term or condition of any permit, when said violation of any law or regulation or of any term or condition of any permit is due to negligence on the part of the Children's Museum. The Children's Museum, at its own costs, expense, and risk shall defend any and all suits, actions, or other legal proceedings that may be brought against or for employees on any such claim or demand of such third persons, or to enforce any such penalty, and pay and satisfy any judgment or decree that may be rendered against the City, its officers, agents, or employees in any such suit, action, or other legal proceeding, when same were due to negligence of the Children's Museum. 22. Enforcement Costs and Attorney's Fees. The prevailing party in any action between the parties to this agreement, brought to enforce the terms of this agreement, may recover from the other party its reasonable costs and attorney's fees in connection with such an action. 23. Entirety and Integrity of Agreement. This document represents the entire and integrated agreement between the City and Children's Museum. This document supersedes and negates all prior negotiations, representations, agreements and amendments, either written or oral, regarding the Premises and the operation of a children's museum on the Premises. Both parties also recognize that some issues may not have been anticipated or addressed herein, and that changes to the agreement may be warranted. This agreement may be amended upon written consent of both parties, to the approval of the City Administrative Officer and the City Attorney and as provided by law. This Agreement is executed this day of , 2000, in the City of San Luis Obispo, State of California. CHILDREN'S MUSEUM Dir ctor 5 7-7 CITY OF SAN LUIS OBISPO Mayor--- — --- - - - . ----_---- : . Attest: City Clerk -- — - Approved as to fob: 6 7-8